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Charts I’m Watching: Aug 4, 2016

USDJPY has not recovered, but is merely bumping along after having seen its rising white channel and falling white channel both break down.

CL, on the other hand, is carrying the entire load of propping up stocks. It rallied over 5% off yesterday’s lows — which was a remarkable feat of manipulation even for CL. It came in the wake of a 1.4MM barrel build in inventory versus the 1.4MM barrel contraction that was expected.

This ramp took CL out of the falling channel it’s been in since Jul 18 and back above the SMA200, which was music to the algos’ ears. The algos don’t care, of course, whether or not the rise was a manipulation (it was) or whether it would last (it shouldn’t.) All they (think they) know is that oil is recovering, which is exactly what whoever manipulated it higher intended.

Our targets remain unchanged from yesterday. We have channel support for ES and SPX coming in right here.

Will it bounce? Keep an eye on CL. It’s back below its SMA200 (40.77), and USDJPY is heading to the bottom of its rising white channel. So, it would appear that they’re going to let the red channels fail sooner or later.

If you see CL suddenly spike above 40.77, you’ll know it’s going to be “later.”

UPDATE: 11:07 AM

Will they or won’t they? SPX is sitting at a deep retracement of this morning’s initial plunge. Sure, it got there through nefarious means. But, that doesn’t mean things can’t get even more “nefarious-er.”

If it’s going to sell off some more, this is the time & place — especially with the euro close coming up.